Then not my opinion, but just opinions that that I’ve read, so transformational for the industry. As for clients, yes, just as we have had increased discussions and interest and excitement from clients in Florida would be on the ballot addition for November. We’re having the same today and I just I’m not sure if you’d heard on an earlier answer, but we’ve had good strong interest even had some signatures today as well. So, it’ll take time right, like there’s a lot of excitement today. We’re playing it cool. We didn’t want to increase our guidance or anything at this point. There’s so many unknowns and we just want to we want to under-promise and over-deliver with exciting time for the industry and for Urban-gro as well, today
Anthony Vendetti: Right. Okay. So that will you will be upside? And if it goes from Schedule 1 to Schedule 3, do you think that expedites changes in the banking regulations, as well.
Brad Nattrass: I don’t believe they’re related. I think any momentum in the industry is fantastic. And from a banking standpoint, you’ve seen that because the FA bill they thought they could tie safer banking to that as of late, they’ve said that it won’t be connected now that it looks like it would go to the lame duck section later or session later in the year and that would be the best avenue to have it passed. But I think positive overall cannabis industry sentiment it helps go a long way. The people are speaking. And I believe from a banking standpoint, politicians they have no option but to listen. So I do see, overall, they’re working together for a better industry for sure.
Anthony Vendetti: Okay. But let’s separate on the banking thing. Okay. And then just in terms of productivity improvements, cost cutting, how — obviously, you decreased expenses, but where are you sort of in that process halfway through completed. Maybe just give us an understanding where you’re at?
Brad Nattrass: From a productivity standpoint, it tied into some of the reductions in general and administrative expenses last year when we had line of sight in the middle of last year when they all run the same ERP, we realized that we were — we had too many service providers on the team. And that’s when we started to adjust and we’ve got to a size now where we’re capturing a large amount of those salaries in COGS, that’s the key. On the last call we had stated that, in 2023 we moved over $1.3 million down into salaries just because of the fact that we weren’t as productive as we wanted to be. So the results in Q1 were very strong there. In terms of optimization, we don’t anticipate at this time making any further reductions.
We’re right-sized right now. A year-over-year from the efforts and the moves we made in 2023. We’re expecting to recognize $8 million in 2024 of savings from a G&A standpoint. And in Q1, we’ve already recognized the 2.8 million versus Q1 of 2023. So we feel, we’re in a great place and we’ve lowered the breakeven level for the company, which is key and we do not anticipate making additional cut to business. At this time — that being said, we’re always looking at expenses, overall expenses and trimming where we can. Dick, is there anything you’d add to that?
Dick Akright: Yes. I think the only thing I would potentially add, Anthony, is just, during the first quarter, there continued to be some reductions. But generally, when we hit the end of the first quarter that was where we got to the headcount levels we were looking to get to. So, I think the ways you’re thinking about things go on further out. Yes, there — the first quarter contains a little bit high on the G&A side that there would be further reductions expected for Q2. But by the time we got to the end of the quarter, we were kind of at exactly at levels where we’re looking to get to.
Anthony Vendetti: Okay. Great. That’s good color. Thanks guys. I’ll hop back in the queue. Appreciate it.
Operator: Thank you. And the next question is coming from Eric Beder from SCC Research. Eric, your line is live.
Eric Beder: Good afternoon. Let’s talk a little bit about something the size of phases here. Commercial, what are you seeing in terms of demand for the commercial business? Has it continued to be as robust and have you been able to continue to expand the services you can offer for that division?
Brad Nattrass: We haven’t expanded the services at all at this point any further. Demand is remained strong. So the one area where we’re watching closely is the length of time. I talked about it in Q4 as well. But the length of time that passes in between where we’re being verbally awarded contracts and we’re actually getting signatures. And so far in Q1, that hasn’t gotten worse, but it hasn’t gotten better either. So that’s one area that we’re watching closely, but where the licenses were not losing. So, it’d be one thing if we’re losing clients or opportunities, but we’re not losing. So it’s just a timing issue. Our pipeline remains strong and we don’t publicly speak about the quantity of pipeline, but it remains strong and very qualified for sure.
Eric Beder: And are you seeing — when you look at kind of your top accounts here, are you seeing them give you larger contracts going forward? I’m saying as they kind of like because I know the commercial is a little bit, it’s not as much a one off and managed sometimes as the cannabis business can be. So are you seeing that trend continue?
Brad Nattrass: We have seen that trend continue over or progress over the last year, not in Q1. We hit a lot of solid singles in Q1, but with no triples or home runs and hence the backlog backed off a little bit 10%, right sequentially, but hitting a lot a lot of add-on contracts to existing projects where they increase the scope and some new smaller projects. But on the larger ones, we do have some that are close and out. We believe that we will secure them. But we don’t have the signatures yet, but no real material increase in size in Q1 to report.
Eric Beder: Sure. You can update on Europe. What are you seeing in terms of trends there? I know there’s been talk about Germany. What are you seeing in terms of the European business on forward?
